Seritage Growth Properties Provides Business Update with Respect to Recent Events Regarding Sears Holdings

Seritage Growth Properties (NYSE: SRG) (the “Company”) today provided a business update related to the recent announcement by Sears Holdings Corporation (“Sears Holdings”) that Sears Holdings has filed for Chapter 11 bankruptcy protection.

“All of our capital investment, leasing and development activity over the last three years is unlocking substantial value, and has significantly diversified our income stream with approximately 70% of our signed leased income now coming from diversified, non-Sears tenants,” said Benjamin Schall, President and Chief Executive Officer. “We have $1 billion of cash and committed capital under our Term Loan facility, which provides us the funds to complete all of our on-going redevelopment projects and cover reductions in cash flow that may result from the potential disruption in Sears income. The completion of our redevelopment projects brings our signed leased income on-line and will replace any potential lost income from Sears Holdings.”

“Our go-forward strategy remains as it has been – to unlock substantial value through investment of capital and the intensive redevelopment of our well-located buildings and land,” continued Mr. Schall. “All of our active projects will continue uninterrupted, and we are excited to further build our pipeline of redevelopment activity by partnering with growing retailers and users, mixed-use developers and institutional capital allocators.”

Additional comments from Mr. Schall can be found in our “Letter from our Chief Executive Officer” dated October 15, 2018 and filed on Form 8-K with the Securities and Exchange Commission.

Development Activities

• Announced Projects: as of September 30, 2018, the Company had completed or commenced 94 redevelopment projects, representing over $1.4 billion of total investment, and will proceed uninterrupted with all active and underway projects. The Company’s share of remaining spending at these projects is approximately $880 million which is expected to be funded with cash on hand and committed borrowing facilities. This capital is being invested at targeted incremental returns of approximately 11% and is creating significant value for our shareholders.
• Development Pipeline: the Company will continue to build its pipeline of redevelopment opportunities through the activation of the remainder of its portfolio for higher and better uses much in the same way it has since its inception in July 2015. The scale and quality of the Company’s portfolio, combined with its unique redevelopment platform and control over its real estate, provide Seritage with competitive advantages that will allow it to continue as an industry leader in transforming retail real estate around the country.

Leasing Activities